The 2012 Christian Leadership Alliance (CLA) National Conference in Orlando, Florida, will be a prime venue for us to demonstrate ECCU’s commitment to investing in ministry. During the three-day event (April 10–12), we’ll present two financial workshops and show videos at two general sessions that illustrate the kingdom impact ECCU member ministries are having.
The two workshops are part of the conference’s educational program:
- ECCU Ministry Development Officer David Lee and ECCU Vice President and Senior Banking Consultant Mark Jones will co-present “Cash Reserves: Why you need them. How to build them.” on Wednesday, April 11, from 8:00 to 9:30 a.m.
- “How to Build a Better Budget,” a panel discussion moderated by Mark Jones, will be offered on Thursday, April 12, from 4:00 to 5:30 p.m. The panel will feature three seasoned ministry financial experts: Hugh Burns, vice president of operations for the Denver Rescue Mission; Billy Burnett, executive vice president and CFO with Joni and Friends; and Vonna Laue, audit partner with CapinCrouse LLP.
Conference attendees who register at ECCU’s booth in the conference exhibit hall will be eligible to win a new iPad®. (For the complete Official Rules*, visit www.eccu.org/cla-sweepstakes.)
Are you going to the CLA conference? You can learn more and register at www.claconference.org.
We’re bringing up the topic of cash reserves again for one simple reason: It’s important. So important, in fact, that we created a free tool to help you discern if your reserves are adequate. Because inadequate reserves can translate into inability to pursue your ministry’s mission.
Case in point: We recently analyzed the financials from a representative sample of churches across the US, and 32% of ministries that experienced financial distress over the past two years maintained less than 51 days of cash reserves. On the flip side, 92% of ministries who maintained over 51 days of cash reserves didn’t experience any financial distress. (Distressed ministries are those that were past due on payments to vendors 60 days or more.)
That’s where the free tool comes in handy. We created an online recording of our recent webinar to help you understand:
- What makes up cash reserves
- Why reserves are important for your ministry
- How to establish a cash reserves target and begin building adequate reserves to reach it
You’ll also hear from a pastor whose church went through the process of building adequate reserves and how it benefited their ministry.
Not only is the webinar free, it’s easy. Simply visit www.eccu.org/cash-reserves-webinar. After providing some basic contact information, you’ll have an opportunity to view the webinar and to download the ECCU white paper, Cash Reserves: How Much is Enough?
Give it a listen and leave a comment letting us know what you found most helpful.
We have had the opportunity to analyze the financial statements of ministries across the U.S. in the past couple of years and we have found some helpful information worth mentioning.
Of those ministries, nearly 20% were deemed to be in financial distress. This meant that these ministry organizations were past due 60 days or more on payments to vendors in the past year.
The top correlation we found to becoming financially distressed was the amount of cash reserves maintained. 32% of the ministries who maintained less than 51 days of cash reserves became financially distressed. Conversely, 92% of those ministries who maintained over 51 days of cash reserves did not become financially distressed.
Now there isn’t any magic in 51 days of reserves specifically. That is just the number our statistical analysis showed to be a significant threshold. More importantly, each ministry should determine how much is enough for their unique ministry. For most ministries, adequate reserves would be something much higher than 51 days of cash reserves.
Financial distress can and will cause significant harm to your ministry. Active ministry is replaced by a survival mentality, cutting costs wherever you can. While it can be prudent to cut unneeded waste, cutting activities and programs which are critical to your mission takes away from you fulfilling your vision as a ministry.
We have written a white paper entitled, “Cash Reserves: How Much is Enough?” which you can read or send to another friend in ministry. In this, we provide a framework which you can use to determine how much is enough for your ministry. In addition, we offer a free consultation for our members with one of our staff to help them work through a process to discover this important information. Click to view our free webinar recording: Cash Reserves: Why you need them. How to build them.
We talk a lot about the importance of maintaining adequate cash reserves here at ECCU, but every once in a while, we’re reminded that cash reserves is part of a larger kingdom picture.
A recent Credit Union Times article, “Tuscaloosa Church New Beneficiary of CU Drive,” highlighted a ministry that was able to assist their community “without any administrative overhead.” After helping nearly 40 families find new homes after an April 27 tornado, Calvary Baptist Church in Tuscaloosa, AL was chosen to receive $50,000 in funds from nearby Corporate America Credit Union. So God provided financial resources for future ministry after the church had demonstrated a commitment to live out their mission.
Tell us about a time when God enabled your ministry to meet a need without the use of overhead.
Have you noticed a decrease in giving to your ministry? I’m sure you have given a lot of thought to possible reasons for the decline, but have you considered that the rise in gas prices could be a contributing factor?
According to a CNN Money article, the average household pays $368 per month on gas – probably the most noticeable increase to a household budget. Your Church blog New Report: Households Spent $368 on Gas Last Month talks about the effects that gas prices could have on giving. It offers direction for how leaders can respond to their congregations and maintain their budget during the summer months as gas prices may continue to rise.
How do you communicate with members or donors about the economy’s impact on their ability to give and on your ministry’s ability to pursue your mission?
